The insurance industry is entering a new era, with the increasing adoption of powerful tools such as advanced analytics, Artificial Intelligence (AI), and automation promising to revolutionize every aspect of the insurance value chain. However, despite the scale of investment made by North American property and casualty (P&C) insurers, companies have made slower progress than expected in their efforts to implement advanced analytics.
Insurers have long used analytics in pricing and underwriting, and only a few outliers remain. In these functions, ‘traditional’ analytics is increasingly insufficient, with 49% of insurers now saying they are incorporating AI into their analytics. While AI has increased use within pricing and underwriting, insurers are still struggling to bring analytics into other parts of their organizations. The aspiration is there, with many insurers saying they intend to bring analytics into areas as diverse as claims, marketing, distribution, and other areas within the next two years.
It is clear that insurers want to use analytics across their business and have the ambition to do so but are struggling to translate this into reality. AI is set to transform the insurance industry, resulting in better outcomes for insurers and consumers. However, foundational capabilities are not in place and still need to be developed to drive better decisions and faster speed to market.
